Risk based audit in construction projects - Role of an Internal Auditor

Internal audit is an independent activity carried out with utmost good faith and integrity to identify the organization's uncertainties. Project management is a systematic process of managing and administrating a project within a pre-defined time frame and cost brackets. Construction projects are exposed to a high degree of risk in terms of their statutes and legal obligations. The project's possible risks can be classified into quantitative and qualitative risks, which have a considerable influence on the execution of the project. Internal audit predominantly depends on the showcase of fair knowledge on project operations, financials, legal and statutory responsibilities. An internal auditor is expected to gain expertise in conducting a critical review of project financials by the International Financial Reporting Standards (FRS). Using his professional ethics, the internal auditor should demonstrate his integrity and honesty and submit a fair and unbiased report on the happenings of the project.  Internal auditors shall not be limited to a specific audit area and spread their vigilance in other areas of operations. This presentation aims to evaluate the role of an internal auditor in assisting the board in blowing the whistle in abnormal transactions.

Author(s): Kameswararao M

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